Hornquist Financial uses the Dimensional Fund Advisor's (DFA) investment methodology in designing your portfolio. This science of investing is based on the investment research that Eugene Fama did on the efficient market hypothesis. He and Kenneth French co-authored the well known research on the value effect and the three-factor model that is used by Dimensional Funds to define asset class investing. The three-factors that provide an excess return premium over market returns are: 1) Stocks outperform Bonds 2) Small Cap stocks outperform Large Cap stocks, and 3)Value stocks outperform Growth stocks; ie) high Book to Market (BtM) stocks outperform Growth stocks. By using a a small cap and value tilt Dimensional Funds capture this excess return premium over the market.
For further information on DFA Funds click on the Dimensional link below.
